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A Win For Nauru

A Win For Nauru
Fiji Airways Flying Fijians captain Dominiko Waqaniburotu wins a lineout against Uruguay at Hartpury College ground in Gloucester, England on November 17, 2018. Photo: Uruguay Rugby
October 05
19:09 2014

The government of Nauru has secured a victory over funds management giant Firebird in the NSW Supreme Court, overturning a ruling that had threatened to cripple the small nation’s economy and prevent it from providing basic services to its citizens.

The NSW Supreme Court ruled two years ago that the Nauruan government owed $16 million to Firebird when a deal over government bonds went south.

The small Pacific nation did not pay any of the money, causing the debt to swell to $30 million ($FJD 50.5m).

All the Nauru government’s funds, contained in 30 Australian-based Westpac bank accounts, was later frozen, leaving it unable to pay its public servants.

The country was facing the imminent shut down of services to its citizens, as well as asylum seekers imprisoned in  detention centres under Australia’s off-shore processing regime.

The Nauruan government’s accounts were to be garnished until the debt was repaid.

But Nauru went back to the NSW Supreme Court to challenge the decision this week, arguing that, as a sovereign nation, it was immune from the orders previously issued by the court.

The Australian government also entered the legal battle, arguing that if Nauru’s bank accounts were garnished there was a risk the $11 million in aid which it recently sent to Nauru for health and education would be diverted to pay the Japanese creditors.

On Friday, Acting Justice Young rejected Nauru’s argument that it needed to be able to pay its public servants.

However, he ultimately accepted the Nauruan government’s position that it was immune from the judgment under section 9 of the Immunity Act which holds that “a foreign state is immune from the jurisdiction of the courts of Australia in a proceeding”.

Firebirds’ argument that their case met the criteria for an exception under the Immunity Act because the matter was a “commercial transaction” was rejected.

It is understood Nauru’s bank accounts could now be re-opened within a week.


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